Global logistics firm DHL expects world trade business to face a “significant downturn” in coming months, dragged lower by heavy losses in exports between the U.S. and China, it said in a quarterly Global Trade Barometer (GTB) report.

Global Trade Barometer measures air and sea cargo trade volumes among seven countries – United Kingdom, India, Germany, Japan, China, South Korea and the U.S., which together account for more than three-quarter of global trade.

Acting as a warning signal, Global Trade Barometer is showing that the outlook for the U.S. had fallen into negative territory for both air and sea cargo. China had declines in air and is in the negative on sea trade.

“The declining outlook for the U.S. exports indicates that, so far, the U.S. is missing its goal for strengthening its export economy with a harsher trade course against China,” DHL said in the report.

During escalating trade wars between the U.S. and China, both countries hiked tariffs on goods to 25 percent. This could affect up to $260 billion of trade between the superpowers.

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Other nations tracked by DHL’s GTB also showed signs of a slowdown in trade. Only the U.K. registered an increase on its index score. This was attributed to companies stockpiling ahead of the October deadline for Brexit.

“The still rather mild global trade contraction can be explained by the fact that during trade conflicts, trade flows do not merely dry out,” DHL said. “Instead, trade routes and supply chains shift into other countries. On a global scale, this partly offsets the negative effects of trade tensions between countries.”